Invoke pre-emption right on iron ore for Odisha plants: CII to govt

In such a crisis, export of about 46 MT of iron ore during the last fiscal has further aggravated the situation for the State industries, it said.

Published: 03rd July 2021 09:38 AM  |   Last Updated: 03rd July 2021 09:38 AM   |  A+A-

Labourrs load steel rods onto a truck at a steel factory on the outskirts of Jammu July 12, 2012. (File | Reuters)

For representational purposes. (File | Reuters)

By Express News Service

BHUBANESWAR: Faced with acute shortage and rising prices of iron ore, the State-based iron and steel industries have urged Odisha government to invoke the ‘right of pre-emption’ or first right of the iron ore for the State plants.Taking up the issue with the Steel and Mines department, the Confederation of Indian Industries (CII) said the low production of iron ore, its rampant dispatch to other states and export coupled with soaring price of the ore have posed a huge challenge to the State-based iron and steel industries.

Stating that iron ore production in the State in 2020-21 was about 111 million tonnes (MT), CII said this was 23 per cent less compared to 145 MT in 2019-20. In terms of environmental clearance (EC) capacity of 182 million tonne per annum (MTPA) from 43 operating mines, the actual production was only 60 per cent (pc). In such a crisis, export of about 46 MT of iron ore during the last fiscal has further aggravated the situation for the State industries, it said.

“Big industries and MSMEs have set up plants through MoU route with a firm commitment from the government for sustainable supply of iron ore. Apart from raw material shortage, iron ore in Odisha is most expensive in the country making the State-based steel industries non-competitive and non-viable,” said Chairman of CII Odisha State Council Manish Kharbanda.In a letter to Steel and Mines Principal Secretary Surendra Kumar, Kharbanda said the primary and secondary steel sectors of the State are not only incurring huge losses but the failure of the government to ensure sustainable supply of iron ore to the iron and steel makers have put the livelihood of around 10 lakh families at stake.

The industry body urged the government to take a cue from Karnataka and invoke the ‘right of pre-emption’ under the Minerals (Other than Atomic and Hydrocarbons Energy Minerals) Concession Rules, 2016 to make iron ore available for the State-based steel units and save thousands of jobs.Rule 12(1) (i) said, “The State government shall all times have the right of pre-emption of the minerals won from the land in respect of which the lease has been granted. The average sale price as published by IBM prevailing at the time of pre-emption shall be paid to the lessee for all such minerals.”

The CII further advised the government to give Odisha-based industry the right of first refusal on all non-preempted ore from merchant mines that is intended to be exported or sold outside Odisha. The pre-emption policy should also ensure that sale of iron ore from merchant mines must take place through a government-run transparent e-bidding platform like the one in Karnataka to ensure fair price discovery.


Right of first refusal on all non-preempted ore from merchant mines 

Sale of iron ore must take place through a government-run e-bidding platform

Sustainable supply of iron ore to Odisha-based steel industries


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